Egomaniacs are infiltrating banks’ graduate training schemes

by Sarah Butcher5 March 2013

Is that academically gifted, high-performing, twentysomething graduate trainee on your team an example of intelligence and ambition incarnate? Or is he simply an egomaniac with delusions about his own abilities?

Is that academically gifted, high-performing, twentysomething graduate trainee on your team an example of intelligence and ambition incarnate? Or is he simply an egomaniac with delusions about his own abilities? If you work in an investment bank or professional services firm, the latter is a distinct possibility. Unintentionally, they may simply be hiring narcissists.

A recent PhD thesis from Jeff Simpson, a student at Massey University in New Zealand found that organisations that seek to attract graduates using elitist graduate marketing messages are particularly likely to attract egomaniacs. Simpson looked at 75 recent recruits to the graduate programme of a professional services firm. Eleven were found to be narcissists.

Several things make investment banks particularly vulnerable to applications from self-lovers. Banks’ graduate recruiters say that at least 70% of their graduate applications are now from men – and men are more prone to egomania (in Simpson’s study, 64% of the narcissistic trainees were male). Banks are also known as elitist status-heavy places which pay well. “Organisations that use messages emphasizing status and money will attract more narcissistic applicants,” confirmed Jean Twenge, a psychology professor at San Diego State University and co-author of book, The Narcissism Epidemic. And banks are big on competency interviews for their graduate recruits. By providing an opportunity for individuals to talk confidently about their successes in the past, competency interviews just encourage narcissists, said Simpson: “The competency-based interview is the ideal opportunity for narcissists to shine.”

Some bank recruiters say egomania is rife among the graduates they hire. “The graduates we hire have always been top of their class. They’re massively entitled and can be very difficult to work with,” said a chief operating officer at one European investment bank in London, speaking on condition of anonymity. “We struggle with our graduate hires,” admitted the head of recruitment at one North American Bank, also speaking on an unnamed basis. “It’s all about what the bank can do for them – we hire students who have been told how wonderful they are for years by their parents and who have achieved excellent grades at university. They really do believe that they are special people.”

Definitions of narcissism vary. Simpson said narcissists are very bad at taking criticism: they can talk about their positive traits with ease, but will go into denial when asked about negative aspects of their personality. Narcissists are also aggressive, exploitative, cynical and mistrustful. They are not very empathetic. And narcissists are not very keen on associating with other people (unless those people are in positions of conspicuous power).

The chief of staff at one US investment bank in the City told us she recently interviewed a text-book narcissist for a graduate role. “I began to challenge his response to a question and he actually held his hand up in my face and commanded, ‘No!”,” she said. “And when we asked him a brain teaser, he suggested we move on to a more ‘normal’ interview style.”

That candidate didn’t get an offer. But many do get hired by banks. Polly Courtney, a former Merrill Lynch trainee-turned-novelist, said that during her time at Merrill, it was often the back office trainees who were worst. “There was one guy who strutted around as though he were CEO, even though he was only 22,” she said. “He always wore the boldest shirts and spent a lot of time in the gym admiring his physique. He now works in a front office role for another firm.”

The self-regard of graduate recruits can be grating for senior bankers who have had humility drummed into them by repetitive rounds of redundancy. “Our graduates often annoy the senior people,” said the senior recruiter. “They want to be able to email the CEO with their opinions and we have to manage their expectations and tell them that’s not such a good idea. There’s no sense of deference.”

Egomania is a demographic issue. Simpson points to research showing that narcissism is highest in 15-year-olds. Intense self-regard declines consistently until people are in their mid-50s, and then begins to rise again. Twenge said that Generation Y (people born between the early 1980s and the early 2000s) self-describe as far more narcissistic than previous generations. “They are also more likely to say they think they are above average in traits such as leadership ability, drive to achieve, and academic ability,” she said.

Not everyone is convinced that banks are drowning under a tide of graduate egomaniacs, however. Nadia Osgood, a freelance graduate recruitment consultant who works with investment banks, said young people applying to banks have the right to be pleased with themselves. “These people have pushed themselves and risen to the top of a very large pool. They’re not narcissistic, they’re just very successful,” she insisted. “There’s actually quite a lot of humility among graduates now.”

Comments (6)

I used to work in a front office role in one of the biggest investment banks. Having applied and interviewed with most of the banks I can definitely say that the way they market themselves seems to be aimed at attracting narcissists. All of them without exception write in their recruitment materials how they have the best people and want to attract the crème de la crème. And how their future employees should not only be top of their class in the best universities but also the captain of a sports team, the president of a university society and people that have won awards and prizes recognizing their extraordinary abilities. Given that these are the requirements that grads have to meet no wonder they eventually become narcissists. Not to speak about all the brain washing that goes on during careers fairs and internships.

By the time you finally get your hands on a job you have been so brain washed that you actually start to believe that you possess extraordinary abilities. You have to believe in that in order to get the job. You need to convince your future employers how special and exceptional you are and in order to do it you need to believe it. Nobody tells you anything though about the humility you actually need to posses to do this job. When you join as a grad in an investment bank it is like the military – nobody cares about your leadership, vision or ideas – all is required is actually to do as you are told, follow orders without objections and keep your head down. And this is where the problem comes because you have been made to believe exactly the opposite.

When I joined in a sales role on the trading floor, one of the senior guys on my team was intentionally trying to break my confidence by getting me to regularly bring breakfast and lunch for the entire team (and for the traders sometimes). I was obviously wondering is this why I went through all the pain of doing a masters in finance at one of UK’s top universities. The person in question did not have higher education. He had started as a back-office clerk back in the times when banking wasn’t so competitive and slowly made his way to front office. Anytime I asked him a question he would answer – “How come you don’t know this, you have a Masters”

I think that if banks and other companies don’t want narcissists they need to speak more realistically about what they require from their employees.
A lot of this blah blah is also intended for them to be able to justify their fees and overblown salaries. A lot of the front office jobs for instance don’t require such extraordinary abilities but they want to make it sound that way to justify being paid millions and to make the rest of the world believe that these jobs are something that very few, very talented people could do.

But the biggest magnet for the narcissists are not the banks but the consultancies of the sort of Mckinsey and BCG.

Banks are a refuge for dysfunctional thieves. It has been this way forever.

Except in humble loan cooperatives in the days when they were founded by groups of average citizens.
Any other type of bank has always been a place for egomaniacs trying to make a quick buck on the back of others.
It is no different now than it was twenty years ago when I interviewed with all those bulge bracket banks, worked in a couple of them, and left in disgust for private entrepreneurship.

The solution:
– Separating asset-based lending (i.e. commercial banking)
from hype-based “activities” (i.e. erroneously called “investment” banking),
– maxxing out salaries and bonuses to the humble contributions all these zombies can actually
provide within the huge behemoth-banks full of capital that is not their own
(just put all these incredibly talented people loose on their own – they go nowhere, as all their
“achievements actually depend 100% on the assets they are sitting on, not on their “talents”)
which will result in dependable lenders and financiers which won’t bankrupt the economy every five years and then cry for mama state for help.

@CityFlyer… “Coat-tailing on the work of corporate bankers with long-standing connections is rife”.

While I agree with many of your points, corporate bankers don’t have real relationships or real sales skills. The majority are “I’ll lend you billions from my banks balance sheet and bank the fee”. That’s not real origination.

If you want to see real bankers check out one of the pure advisory boutiques who don’t have a firm name or balance sheet to trade off

@OxBanker – fair enough – the lifespan of the majority of pure advisory boutiques is however fairly short. Those that endure truly do have real connections and networks and are worth their weight in gold.

As a breed, though I was not one, there were some corporate bankers who likewise had those connections, but reality is that the majority of investment and corporate bankers had little, and failed to realise that “their” network was the institution’s name.